Item 1.01 Entry into a Material Definitive Agreement.
Indenture and 1.65% First Priority Senior Secured Notes due 2027
On June 14, 2021, Berry Global Group, Inc. ("Berry"), via its wholly owned
subsidiary, Berry Global, Inc. ("BGI"), issued $400,000,000 aggregate principal
amount of BGI's 1.65% First Priority Senior Secured Notes due 2027 (the "First
Priority Notes"), pursuant to an Indenture, dated as of June 14, 2021, among
BGI, Berry and certain of Berry's subsidiaries party thereto as guarantors, and
U.S. Bank National Association, as trustee and collateral agent (the
The First Priority Notes are senior obligations of BGI and have the benefit of
the first priority security interest in the collateral described below. The
First Priority Notes bear interest at a rate of 1.65%, payable semiannually, in
cash in arrears, on January 15 and July 15 of each year, commencing on January
15, 2022, to holders of record at the close of business on January 1 or July 1,
as the case may be, immediately preceding the interest payment date. The First
Priority Notes will mature on January 15, 2027.
Prior to December 15, 2026 (the "Par Call Date"), BGI may redeem the First
Priority Notes at its option, in whole at any time or in part from time to time,
upon not less than 30 nor more than 60 days' prior notice mailed by first-class
mail or sent electronically to each holder's registered address, at a redemption
price equal to the greater of (i) 100% of the principal amount of the First
Priority Notes redeemed or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest on the notes being redeemed
(assuming that such First Priority Notes matured on the Par Call Date),
exclusive of interest accrued to, but not including, the redemption date,
discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at a rate equal to the sum of the
applicable treasury rate plus 15 basis points. On or after the Par Call Date,
the First Priority Notes will be redeemable, in whole or in part, at BGI's
option, at any time or from time to time, on at least 15 days' but not more than
60 days' prior notice to the holders of the First Priority Notes to be redeemed,
at a redemption price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest, if any to, but not including, the date of
Any redemption or notice described above may, at BGI's discretion, be subject to
one or more conditions precedent.
The First Priority Notes are fully and unconditionally guaranteed, jointly and
severally, on a first priority senior secured basis, by each of BGI's existing
and future direct or indirect subsidiaries that guarantees its senior secured
credit facilities and its existing first and second priority senior secured
notes, and by Berry on an unsecured basis. Under certain circumstances,
subsidiaries may be released from these guarantees without the consent of the
holders of the First Priority Notes.
The First Priority Notes and the guarantees thereof are unsubordinated
obligations of BGI and the guarantors, are equal in right of payment to all of
BGI's and such guarantors' existing and future unsubordinated indebtedness and
structurally subordinated to all the liabilities of BGI's subsidiaries that are
not or do not become subsidiary guarantors, are secured by a second priority
lien on accounts receivable, inventory and certain related assets that secure
BGI's revolving credit facility and a first priority security interest in
substantially all of the other assets of BGI and the existing and future
domestic subsidiary guarantors that guarantee its obligations under its senior
secured credit facilities (subject to certain specified exceptions and permitted
liens), are contractually senior to the existing second priority secured notes
in respect of the right to receive proceeds of the collateral, are effectively
senior to all of BGI's and the subsidiary guarantors' existing and future
indebtedness that is not secured by a lien on the collateral to the extent of
the value of the collateral securing the First Priority Notes, equal in right of
BGI's existing first priority notes, and are effectively junior to the
obligations under BGI's revolving credit facility to the extent of the value of
the collateral that secures such facility on a senior basis.
The Indenture contains a number of restrictive covenants, including those
relating to the ability of BGI to:
· create or incur certain liens;
· incur debt or grant a subsidiary guarantee of debt incurred under our credit
agreements or certain capital markets debt without also providing a guarantee
of the First Priority Notes; and
· transfer all or substantially all of BGI's assets or enter into merger or
Subject to certain limitations, in the event of the occurrence of both (1) a
change of control of BGI and (2) a withdrawal or downgrade of the investment
grade ratings of the First Priority Notes by two or more of Moody's Investors
Service, Inc., S&P Global Ratings, a division of S&P Global Inc., and Fitch
Ratings, Inc. (collectively, the "Rating Agencies") or a change of control of
transaction is proposed and two or more Rating Agencies indicate that, if
consummated, such transaction (alone or together with any related
recapitalization or refinancing transactions) would cause the Rating Agency to
withdraw its investment grade ratings or downgrade the ratings assigned to the
First Priority Notes below investment grade, BGI will be required to make an
offer to purchase the First Priority Notes at a price equal to 101% of the
principal amount of the First Priority Notes, plus accrued and unpaid interest
to, but not including, the date of repurchase.
Upon the occurrence of certain events of default specified in the Indenture, the
principal of, premium, if any, and accrued but unpaid interest and any other
monetary obligations on all the then outstanding First Priority Notes may become
due and payable immediately. The foregoing description of the First Priority
Notes and the Indenture governing First Priority Notes is qualified in its
entirety by reference to the actual text of the Indenture governing the First
Priority Notes (including the forms of First Priority Notes included therein),
which is filed herewith as Exhibit 4.1 and is incorporated herein by reference.
Registration Rights Agreement
On June 14, 2021, BGI, Berry, certain of BGI's subsidiaries party thereto as
guarantors, and J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and
Goldman Sachs & Co. LLC, as representatives of the initial purchasers of the
First Priority Notes, entered into a registration rights agreement (the
"Registration Rights Agreement") with respect to the First Priority Notes.
Capitalized terms not defined in this section shall have the meanings specified
in the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, BGI and the Guarantors will agree
to use their commercially reasonable efforts to (x) within 270 days of June 14,
2021, file with the Commission and (y) within 365 days of June 14, 2021, cause
to become effective a registration statement, on the appropriate form under the
Securities Act, relating to an offer to exchange the First Priority Notes for
registered notes with terms identical to the First Priority Notes (except that
the First Priority Notes will not be subject to restrictions on transfer or to
any increase in interest rate as described below) (the "Exchange Notes").
Following the effectiveness of the exchange offer registration statement, BGI
and the Guarantors will offer to the holders who are able to make certain
representations the opportunity to exchange their First Priority Notes for the
If, with respect to the First Priority Notes:
(1) BGI and the Guarantors are not permitted to consummate the exchange offer
because the exchange offer is not permitted by applicable law or Commission
(2) for any reason the exchange offer is not consummated within 30 days after
the date notice of the exchange offer is required to be mailed to the
(3) any holder notifies us prior to the 20th day following consummation of the
exchange offer that:
(a) it is prohibited by law or Commission policy from participating in the
(b) it may not resell the Exchange Notes acquired by it in the exchange offer to
the public without delivering a prospectus (other than by reason of such
holder's status as our affiliate) and the prospectus contained in the exchange
offer registration statement is not appropriate or available for such resales;
(c) it is a broker-dealer and owns the First Priority Notes acquired directly
from us or our affiliate,
BGI and the Guarantors will be obligated, with respect to the First Priority
Notes, to cause to be filed with the Commission a shelf registration statement
(the "Shelf Registration Statement") to cover the resales of the First Priority
Notes, by holders thereof who satisfy certain conditions relating to the
provision of information in connection with the Shelf Registration Statement,
within 270 days after such filing obligation arises.
BGI and the Guarantors will use their commercially reasonable efforts to cause
such Shelf Registration Statement to be declared effective by the Commission as
promptly as possible.
The Registration Rights Agreement provides that, if:
(1) unless the exchange offer would not be permitted under applicable law or
. . .
Item 2.03 Creation of a Direct Financial Obligation.
The information set forth under Item 1.01 above is incorporated by reference
into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
4.1 Indenture, among Berry Global, Inc., certain guarantors party thereto,
U.S. Bank National Association, as Trustee and Collateral Agent, relating
to the 1.65% First Priority Senior Secured Notes due 2027, dated June 14,
4.2 Registration Rights Agreement, by and between Berry Global, Inc., Berry
Global Group, Inc., each subsidiary of Berry Global, Inc. identified
therein, and J.P. Morgan Securities LLC, Citigroup Global Markets Inc.
and Goldman Sachs & Co. LLC, on behalf of themselves and as
representatives of the initial purchasers, relating to the 1.65% First
Priority Senior Secured Notes due 2027.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
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